In the realm of business, a contract serves as a vital link between two parties, solidifying their mutual commitment and understanding through a set of specified terms and conditions, often entailing financial commitments. Within the sophisticated Oracle Fusion Financial system, the practice of contract management comes to the fore, playing a pivotal role in overseeing and monitoring these contractual agreements within the realm of financial management.
These contracts are intertwined with numerous projects, serving as the backbone of financial relationships, and, moreover, they become indispensable tools for organizations in effectively navigating their financial responsibilities and obligations.
Creation of Contract
1. Navigation: Homepage > Contract Management > Contracts
Fig. 1.1: Homepage of Contract management
2. Navigation: Contracts > Task pane area > Create Contract
Fig. 1.2: Navigation For Creation of Contract
3. Create a Contract dialog box
- Choose the business unit and legal Entity
- A contract can be designated as either a Soft Limit or a Hard Limit.
- The start date is the date from which the contract is effective
- Currency can be chosen as per the requirement
- After filling in the mandatory fields click on Save and Continue
Fig. 1.3: Create Contract dialog box
In the overview menu contract number will be displayed where the contract name can be added
- The start date and type of the contract will be displayed, and the status will be inactive
- Entity location and UOM (Unit of Measure) must be filled.
- Bill amount varies as Daily/Weekly/Monthly
Fig. 1.4: Overview in Creation of Contract
- In the Lines section, the name and description of the line should be updated
- Here, accounts are additionally specified, including the ship-to account number, ship-to account description, and ship-to party.
Fig. 1.5: Lines Overview
- In the billing area bill plan must be defined for the contract to control billing along with its tax control classification codes
Fig. 1.6: Lines Billing
6. Under the Associated Projects section
- Details of Projects, Tasks, and Funded amount can be added where billing occurs grouping these projects
Fig. 1.7: Line Associated Projects
- The Parties tabs display information on customer and supplier
- Customer and Supplier details can be updated.
- While adding the customer details the Customer Contacts name and email of the customer representative can be added
Fig. 1.8: Parties of the Contract
- In the Accounts section under contracts, it gives information about the bill to & and ship to of the customer, which is the bill to account number, the bill to account description, a bill to the site, a bill to the site, Bill to address need ship-to account number, ship-to account description, ship to party, ship to site, ship to address.
Fig. 1.9: Accounts of the Contracts
- Contract deliverables give the information about contract agreement with the customer and supplier.
- It also helps in commitments of contracts, deliverables due, and verifications of the contract from scratch to sign the contract.
- In the billing section bill plan must be defined with invoice method, Billing cycle, Bill rates, and classification of the invoice method
- Contract organization, Transaction type, and other details can be added.
Fig. 1.10: Billing of Contract
10. Financial Summary:
- The financial summary section displays the Contract invoices and Project details
- It also displays a graph or table of contract currency and ledger period with detailed information of Invoiced amount and Revenue.
Fig. 1.11: Financial Summary
- A primary contract document can be added to collect all the information from the initial stage of the contract to final stage of the contract
- If the contract needs more information, you can upload supporting documents.
Fig. 1.12: Documents of the contract
- The History section provides information about changes to the contract, including amendments, holds, approvals, and the date and time when the user made modifications. It also displays the User’s contact information and the status of the contract
Fig. 1.13: History of the contract
13. Currency Conversion:
- Currency conversion provides information about the type of conversion rate, the date of conversion, and details regarding the currency used for invoicing and ledger entries.
Fig. 1.14: Currency conversion of the contract
14. Related Contracts:
- Related contracts can be used for specifying previous accounts that are related to the contract parties which includes their bill to and ship to details.
Fig. 1.15: Related contracts of the contract
- After filing the mandatory details on the contract, click on Save and close
- It will validate the contract from Contracts Overview.
Fig. 1.16: Save and Close of the contract
15. After saving the contract:
- Navigation: Homepage > Contract Management> Contracts
- In the number field, enter the contract number and then click on the search button.
- In search results newly created contract will be displayed with all informative fields of the contract
Fig. 1.17: Search for Contract
- Contracts specify terms and conditions, reducing the risk of legal disputes and ensuring that both parties adhere to the agreed-upon terms.
- Automation reduces the time it takes to get contracts approved, leading to quicker decision-making and execution.
- The Contracts module often includes features for monitoring contract performance against predefined key performance indicators (KPIs).
Points To Consider:
- Setting up and personalizing Oracle Fusion Contracts to align with intricate business processes might pose a challenge.
- Oracle Fusion Contracts may not have industry-specific features or templates for certain niche industries.
- Reporting capabilities may have limitations, and creating highly customized or complex reports may require additional tools or expertise.
Author: Goutham Sankar, Oracle Cloud Consultant